GENERATION INTERCONNECTION OR CHANGE

REQUEST PROCEDURE

February 2007

Proposed Implementation March 1, 2007

ERCOT

System Planning, Transmission Services

2705 West Lake Drive

Taylor, Texas76574-2136

Main Office Phone (512) 248-3000

1.0 INTRODUCTION

1.1 Purpose

The primary purpose of the ERCOT Generation Interconnection or Change Request Procedure is to provide market participants a detailed understanding of the requirements and procedures used to facilitate new or modified generation interconnections with the transmission system of the Electric Reliability Council of Texas (ERCOT). Through its review of all interconnection or change requests, ERCOT staff expects to:

  • Identify any potential electric system security concerns with interconnecting new or modified generation,
  • Increase the quality of communications between the generating entity (GE), power generation company (PGC), transmission service providers (TSP), and ERCOT,
  • Provide for the best available information on future capacity additions for use in identifying, forecasting, and analyzing both short- and long-range ERCOT capabilities, demands, and reserves, and
  • Provide for accurate and appropriate data to aid ERCOT staff and stakeholders in identifying and developing potential transmission improvement projects to alleviate expected transmission constraints in order to maintain the reliability of the ERCOT system.

The requirements and procedures in this document conform to all rules, standards, protocols, and guides of the Public Utility Commission of Texas (PUCT or Commission), the North American Electric Reliability Council (NERC), and ERCOT.

1.2 Applicability

The requirements in this document are applicable, in general, to the following:

  • New generating units, plants, or wind farms 10 MW or greater planning to interconnect to transmission in the ERCOT system.
  • Existing generating units interconnected in the ERCOT system that are seeking to upgrade their rated capacity 10 MW or greater within a single year, re-power, or change their physical point of interconnection.

Interconnection requirements for on-site distributed generation[1] are not subject to these procedures but are addressed in PUCT Substantive Rules §25.211 (Interconnection of On-Site Distributed Generation) and §25.212 (Technical Requirements for Interconnection and Parallel Operation of On-Site Distributed Generation).

1.3 Confidentiality

During the security screening study phase of the interconnection process and in accordance with the ERCOT Protocols, data, documents, or other information required by ERCOT from a GE or PGC related to a request for generation interconnection are considered “protected information” to the extent that such information is not otherwise publicly available[2]. As a result, ERCOT staff shall not publicly release any of the “protected” data, documents, or other information until a request for a full interconnection study (FIS) is received. Security screening study information will only be publicly released in aggregation amounts. When a request for a full interconnection study is received, the following information will become public and used in reports:

  1. Proposed MW Capacity
  2. Projected month and year of commercial operation
  3. Fuel and Technology Type
  4. County location

As the full interconnection study proceeds and executes an interconnection agreement or completes a financial arrangement for transmission construction, data, documents or other information will become public.

1.3.2 Public Projects

When a GE or PGC executes an interconnection agreement or completes a financial arrangement for transmission construction with a TSP, ERCOT and the TSP will reclassify the project as a confirmed or “public project” and the respective studies will be publicly posted when finalized. The public projects will be added to all ERCOT databases after the steady-state, dynamic, system protection, and facilities portions of the FIS are completed and interconnection requirements are identified.

1.4 Transmission Construction Issues

PUCT Substantive Rule §25.191 (Transmission Service Requirements) requires a TSP to build sufficient transmission or distribution facilities on a nondiscriminatory basis to support the reliable interconnection of generation to its electrical network. Depending upon the specific findings of the full interconnection study (discussed in more detail in Section 2.3), the TSP may be required, under Texas law[3], to seek a Certificate of Convenience and Necessity (CCN) from the PUCT before construction can begin.

1.4.1 Certificate of Convenience and Necessity

In order for the PUCT to grant a CCN, Texas law and PUCT rules require the Commission to make a determination that the proposed transmission enhancements are in the public interest[4].

In many instances, additional transmission improvements (other than those transmission improvements identified in the interconnection agreement) may be required to enable the GE or PGC to reach its desired markets, for ERCOT to minimize any transmission constraints in facilitating the competitive market, and to lower congestion costs. When this occurs, ERCOT staff will work with the respective Regional Planning Groups in accordance with the ERCOT Power System Planning Charter and Processes[5]. Should the Regional Planning Process determine that additional transmission will be required to fully integrate the GE or PGC’s generation project, the appropriate TSP(s) responsible for completing the specified improvement project(s) may also have to file a CCN(s) for their respective portion(s) of the work.

While ERCOT’s evaluation of need in the regional planning process is important and given significant weight by the Commission[6], the PUCT, via the CCN process, has, under Texas law, the final authority to ultimately decide whether a transmission line is in the public interest and should be built.

1.4.2 CCN Approval Timelines

Typically, TSPs require approximately 12 months to prepare a CCN application for filing with the PUCT. This extended time is generally due to the TSP identifying and evaluating the environmental impacts of potential alternative transmission line routes, as well as the requirement to provide adequate public notice and to hold public meetings in the project area to listen to and address landowner concerns.

After the CCN application is filed by the TSP, the PUCT staff must determine if the application is materially complete. Any inadequacies or deficiencies in the application must be remedied by the TSP before the Commission will take any action on the application. Once the PUCT staff has provided notice that the application is materially complete, current rules allow the Commission up to 12 months for hearing and deciding the outcome of the CCN request. Most CCN applications involving new transmission right of way may become contested cases generally requiring the TSP and any intervening parties the right to discovery, preparing and filing direct and rebuttal testimony, and participating in a hearing on the merits before a State Office of Administrative Hearing (SOAH) administrative law judge (ALJ). In most contested cases, the ALJ has been delegated the responsibility to determine for the Commission if the project is in the public interest.

Following the hearing on the merits and the issuance of a Proposal for Decision (PFD) by the ALJ, the Commission will either grant or deny the CCN. Assuming a CCN has been granted, recent experience in ERCOT by TSPs has shown that the acquisition of new or additional transmission right of way and actual construction can take an additional 10 to 18 months.

Therefore, if a GE or PGC desires full transfer capability when its generation is first available for commercial operation on the ERCOT system, ERCOT recommends that a GE or PGC consider making a firm commitment (signed interconnection agreement with the TSP) for the project at least four years prior to the desired commercial in-service date of the generator’s project. This early commitment is necessary due to the timeline required by the TSP for obtaining all regulatory approvals and rights of way, and for the actual construction of the transmission line project. Moreover, the GE or PGC should recognize that some projects may require a commitment as long as eight years in advance of desired in-service date depending on the generation project’s impact on the ERCOT transmission system.

1.5 Communications Between ERCOT and GE or PGC

ERCOT’s primary contact for all questions and information related to generation interconnection request applications, fees, and required generation data is ?.

Questions concerning this generation interconnection procedure should be directed to ?.

The GE or PGC shall maintain communications with ERCOT staff at all stages of the generation interconnection process. Such communication will include any changes in status, capacity, in-service date, signing of interconnection agreement, etc. All changes of ownership must be communicated to ERCOT and the TSP when the ownership transfer occurs. At the completion of all studies and the signing of an interconnection agreement, the TSP and GE/PGC will transmit the documents to ERCOT. The GE/PGC should also provide ERCOT with the status of their air permits and when they receive a permit for their project.

2.0 INTERCONNECTION PROCESS AND PROCEDURES

The ERCOT interconnection process is in accordance with PUCT Substantive Rule §25.198 (Initiating Transmission Service) which delegates to ERCOT the responsibility for implementing the transmission interconnection process.

2.1 Interconnection Request Application

Any generating entity (GE) or power generation company (PGC) seeking an interconnection to the ERCOT transmission system (as applicable in Section 1.2) must submit a generation interconnection request application, required generation information (as detailed in Section 3.1), and the appropriate fee (as detailed in Section 3.2) to ERCOT.

The GE or PGC shall include in the generation interconnection request application all information necessary to allow for timely development, design, and implementation of any electric system improvements or enhancements required by ERCOT and the TSP to reliably meet the interconnection requirements of the proposed generation. This information shall be of sufficient detail for use in establishing transfer capabilities, operating limits (including stability), and planning margins to provide both reliability and operating efficiency as well as facilitating coordinated planning for future transmission system additions.

Should the generation interconnection request application fail to include all generation interconnection information or applicable fees, ERCOT staff will notify the GE or PGC within 7 days through informal communications in an attempt to remedy the application’s deficiencies. Once the application has been deemed materially complete, ERCOT staff will date-stamp the application, add the interconnection request to the ERCOT interconnection list, and notify the GE or PGC of receipt of the completed application within 10 days. The GE or PGC should note that the date stamp is not a reservation of transmission capacity, either planned or unplanned.

After receiving the completed generation entity information sheet, appropriate security screening study fee, and required generation plant data, ERCOT staff will then initiate a steady-state security screening study.

2.1.1 Submitting Request To ERCOT

All generation interconnection request applications, fees, and supporting data must be received in writing by ERCOT. Facsimile (FAX), Internet email, or other electronic requests for interconnection will not be accepted. All interconnection correspondence should be sent to the following address:

GENERATION INTERCONNECTION REQUEST

ATTN: LINDA SHIREY (TCC1 1N059)

ERCOT, INC.

2705 WEST LAKE DRIVE

TAYLOR, TEXAS76574-2136

In order to clearly identify the application and ensure timely processing of the request and due to the large volume of mail received at ERCOT each day, it is important that GENERATION INTERCONNECTION REQUEST is the first line of the address.

2.1.2 Unique Project Identification

Since project names change frequently and in order to facilitate reliable communications between ERCOT, GEs, PGCs, and TSPs, ERCOT staff will assign a unique name to all generation interconnection request applications according to the following convention:

yrINRxxxx

where: yr is the calendar year the generation is anticipated to be online (08, 09, 10)

INR indicates interconnection request

xxxx is a sequence number beginning with 0001 (reset for each year)

It is vital that all correspondence relating to a specific generation interconnection request application, security screening study, or full interconnection study reference this unique project number.

2.1.3 Request Application Fee

In order to consider the interconnection or change application, the security screening study fee (as discussed in Section 3.2.1) must be remitted to ERCOT along with the generation interconnection request application. The check should be made payable to Electric Reliability Council of Texas, Inc. The security screening study fee and stability modeling feeare non-refundable.

2.2 Security Screening Study

For each proposed generation interconnection or change project, ERCOT staff will conduct a steady-state security screening study (including power flow and transfer studies) based on the expected in-service year to determine the feasibility of interconnection at the site proposed by the GE or PGC. The security screening study is a quick review of the project and generally includes a number of initial assumptions from both ERCOT and the GE or PGC. The “ballpark” results of this study will assist ERCOT in determining the level at which the generator can expect to operate simultaneously with other known generation in the area before significant transmission additions or enhancements may be required. During the course of this study, ERCOT staff may consult with the affected TSP, if needed, to ensure the most efficient means of assuring the feasibility of transmission service is identified and examined.

Upon completion of the security screening study, ERCOT staff will present the GE or PGC a preliminary estimate of future transmission additions or enhancements ERCOT estimates will be required to effect the full transfer of the proposed new or modified generation. ERCOT will also inform the GE or PGC about any additional transmission system improvements estimated to be required for the continued security and reliability of the ERCOT system.

Following the presentation of the security screening study results, the GE or PGC must determine whether it wants to continue the interconnection process by formally requesting a full interconnection study or to withdraw its application. Should the GE or PGC decide to go forward at the named site, the GE or PGC will notify ERCOT in writing within 180 days of its desire to pursue a full interconnection study. Upon receiving this notification, ERCOT staff will then notify the TSPs and will begin initiation and coordination of the full interconnection study.

Unless ERCOT receives notice from the GE or PGC of its decision to go forward with the proposed project, ERCOT will not initiate a full interconnection study. Such notice must be received in writing by ERCOT within 180 days following completion of the security screening study.

However, should the GE or PGC decline to notify ERCOT of their intent to initiate a full interconnection study within the 180 days, ERCOT will consider the interconnection request cancelled and no longer valid. Subsequently, should the GE or PGC wish to proceed after the initial 180-day period, ERCOT will consider the original security screening study invalid and the process must begin again starting with a new request for a security screening study and payment of the appropriate fee. The GE or PGC will also be required to provide to ERCOT any updates or changes in the project’s generation plant data.

2.3 Full Interconnection Study

A full interconnection study (FIS) may be requested at the same time as a security screening study. Both fees (security screening study and stability modeling fee) for the security screening study and the full interconnection study will apply. Requesting both studies at the same time may shorten the overall time to complete the generation interconnection process.

After receiving notice and fee(s) from the GE or PGC to proceed with a full interconnection study, ERCOT will schedule a preliminary interconnection study meeting consisting of ERCOT staff, the GE or PGC, and all TSPs. At this meeting, ERCOT will present the proposed interconnection or change request and the results of the security screening study and will then lead a general discussion of the preliminary study scope of work, including which study elements may be required to complete the FIS.

2.3.1 Confidentiality

Once a full interconnection study is requested by the GE or PGC, the following information will become public:

1.Proposed MW Capacity

2.Projected month and year of commercial operation

3.Fuel and Technology Type

4.County location

As the full interconnection study proceeds and executes an interconnection agreement or completes a financial arrangement for transmission construction, data, documents or other information will become public. Once classified as a public project, ERCOT will post the project description, copies of the generation interconnection studies, and related transmission improvement projects on the ERCOT website. The full interconnect scope agreement will remain as protected information and will not be released to parties outside ERCOT and the TSP. Every member of the FIST may review and provide open comment on the scope agreement. Studies part of the FIS will be public and posted when they are completed (finalized by the study group and accepted).

2.3.2 Proof of Site Control

Before ERCOT will proceed with the initiation of a full interconnection study, the GE or PGC must submit to ERCOT the appropriate fee (as discussed in detail in Section 3.2.2) and proof of site control.

To establish proof of site control, the GE or PGC must demonstrate through an affiliated company, through a trustee, or directly in its name that:

  1. The GE or PGC is the owner in fee simple of the real property to be utilized by the facilities for which any new generation interconnection is sought, or
  2. The GE or PGC holds a valid written leasehold interest in the real property to be utilized by the facilities for which new generation interconnection is sought, or
  3. The GE or PGC holds a valid written option to purchase or obtain a leasehold interest in the real property to be utilized by the facilities for which new generation interconnection is sought, or
  4. The GE or PGC holds a duly executed written contract to purchase or obtain a leasehold interest in the real property to be utilized by the facilities for which new generation interconnection is sought.

The GE or PGC must maintain site control throughout the duration of the FIS and until execution of an interconnection agreement. Otherwise, ERCOT will consider the request for interconnection withdrawn as of the date of the loss of site control unless the applicant can show within 30 days that it has re-established site control or has established control of a new site that would not result in any material modification of any interconnection study requested under the current application.